Investigation Report on Cable TV Service Interruption. at Lai Chi Kok Bay Garden. 7 May Authority means the Telecommunications Authority;

Transcription

1 Investigation Report on Cable TV Service Interruption at Lai Chi Kok Bay Garden Interpretation 7 May 2003 In this Investigation Report, unless the context otherwise requires, Authority means the Telecommunications Authority; Cheung Hing means Cheung Hing Electronic & Electrical Eng. Co., Ltd; Existing IBCCDS means the IBCCDS comprising the vertical coaxial cable installed by Rediffusion and the horizontal drop cables owned by the IO at the Premises; Existing SMATV System means the SMATV system comprising the Existing IBCCDS and a terrestrial and satellite television receiving headend provided by Rediffusion at the Premises; HKCTV means Hong Kong Cable Television Limited; IBCCDS means in-building coaxial cable distribution system; i-cable means i-cable Communications Limited; 1

2 IO means the Incorporated Owners of the Premises; New IBCCDS means the IBCCDS comprising the vertical coaxial cable installed by Cheung Hing and the horizontal drop cables owned by the IO at the Premises; New SMATV System means the SMATV system comprising the New IBCCDS and a terrestrial and satellite television receiving headend provided by Cheung Hing at the Premises; OFTA means the Office of the Telecommunications Authority; Ordinance means the Telecommunications Ordinance (Cap 106); Premises means Lai Chi Kok Bay Garden, 272 Lai King Hill Road, Lai Chi Kok, Kowloon; Rediffusion means Rediffusion Satellite Services Ltd; and SMATV means Satellite Master Antenna Television. Background 2. On 7 December 2002, HKCTV informed the IO that the IO and/or Cheung Hing had removed or disconnected the horizontal drop cables on each floor at the Premises from HKCTV s network, 2

3 interrupting the subscription television service to over 160 HKCTV s subscribers at the Premises. The letter was circulated to OFTA for information. HKCTV formally lodged the complaint with OFTA on 12 December 2002 and sought the Authority s intervention. OFTA has also received a number of complaints from HKCTV s subscribers at the Premises about the service interruption. 3. OFTA has conducted investigation and organized a number of mediation meetings among the IO, Cheung Hing and HKCTV. According to the information collected from the investigation and mediation, it transpires that there was a service contract between the IO and Rediffusion for the installation, maintenance and provision of SMATV service to the residents at the Premises (hereunder called the Service Contract ). Rediffusion provided the SMATV service by using the Existing SMATV System. The Existing SMATV System comprises, among other components, horizontal drop cables leading into individual premises of residents. The IO has provided information that the horizontal drop cables were installed when the Premises was built. The IO s right of using the horizontal drop cables can be demonstrated by its right of entering into the Service Contract for the establishment of the Existing SMATV System and that of entering into contract with Cheung Hing for the establishment of the New SMATV System. Some time after the installation of the Existing SMATV System in 1992, HKCTV also started to make use of the Existing IBCCDS (i.e. the Existing SMATV System less the terrestrial and satellite television receiving headend) for provision of subscription television service in (The vertical 3

4 coaxial cable of the Existing IBCCDS therefore formed part of the HKCTV s network used for the delivery of HKCTV s subscription television service.) 4. The Service Contract expired on 3 December Rediffusion has after termination of the Service Contract transferred the ownership of the Existing SMATV System (less the horizontal drop cables not owned by Rediffusion prior to the transfer) to i-cable which is the holding company of HKCTV. HKCTV continued to use the Existing IBCCDS to provide subscription television service at the Premises. The IO intended to appoint a new SMATV licensee to build the New SMATV System to replace the Existing SMATV System. The New SMATV System was to incorporate the horizontal drop cables. The IO had prior to expiry of the Service Contract informed HKCTV that HKCTV could not use the Existing IBCCDS (which includes the horizontal drop cables) for provision of the subscription television service and has requested HKCTV to make appropriate arrangements to maintain continuity of the subscription television service. No agreement was ever reached by the IO and HKCTV on the use of the horizontal drop cables. The IO then appointed Cheung Hing to build and operate the New SMATV System and instructed Cheung Hing to connect the horizontal drop cables on each floor of the Premises to the vertical coaxial cable installed by Cheung Hing to form the New SMATV System. As a result, the subscription television service was interrupted. 4

5 5. As a result of the mediation of OFTA, the subscription television service at the Premises was restored on 1 March The IO has installed 4-way combiners at the horizontal drop cables so as to enable different services to be connected to the horizontal drop cables via the combiners. Cheung Hing has reconnected the output from HKCTV s network to the combiners of the horizontal drop cables at the Premises to enable HKCTV s subscribers to receive HKCTV s subscription television service. At the same time, HKCTV has removed the terrestrial television reception antenna and the Closed Circuit Television ( CCTV ) modulators and components from its network in order to avoid interference to the terrestrial television reception and the CCTV signals provided via the New SMATV System. Findings of the Authority Section 27 of the Ordinance 6. Section 27 of the Ordinance provides, Any person who damages, removes or interferes in any way whatsoever with a telecommunications installation with intent to (a) prevent or obstruct the transmission or delivery of a message; or (b) intercept or discover the contents of a message, shall be guilty of an offence and shall be liable on summary 5

6 conviction to a fine of $20,000 and to imprisonment for 2 years. 7. In the context of section 27, the words damage, remove or interfere should be construed, by their literal or legal meanings, to have the connotation of acting without right or authorization. For example, a user would not have committed the act of damaging, removing or interfering with a telecommunications installation in contravention of section 27 if he should disconnect his own fax terminal from the wall socket terminating a telecommunications line as he would have the right to perform such act and would have been aware of, and accepted, the consequence of the disconnection. On the facts of this case, the IO (or Cheung Hing under instruction of the IO) re-deployed the horizontal drop cables and such re-deployment had the effect of preventing or obstructing the delivery of HKCTV s subscription television service to the residents connected to the end of the horizontal drop cables. Whether the IO had been acting without right or authorization would depend on the exact authorization under the relevant instrument (e.g. the deed of mutual covenant) in managing the common parts of the building including the horizontal drop cables and whether authorization had been given to the IO by the residents served by the cables for the disconnection. As explained in paragraph 3, the right of the IO to use the horizontal drop cables can be demonstrated by its right of entering into the Service Contract for the establishment of the Existing SMATV System and that of entering into contract with Cheung Hing for establishment of the New SMATV System. Having considered the fact that the IO has the right of use and disposal of the cables and that HKCTV could have occupied the 6

7 cables without authorization after expiry of the Service Contract, the Authority is not satisfied that there is cogent evidence to prove beyond reasonable doubt that the IO or Cheung Hing had acted without right or authorization in re-deploying the cables. 8. The Authority is also not satisfied that there is cogent evidence to prove beyond reasonable doubt that the IO or Cheung Hing has the specific intent of disrupting HKCTV s subscription television services. On evidence, their intent was to establish a new SMATV system and sufficient advance notice had been given to HKCTV to make appropriate arrangements to ensure continued provision of the subscription television services. 9. Therefore, after careful evaluation of the facts and surrounding circumstances of this case, the Authority is not minded to proceed against IO or Cheung Hing (acting under the instruction of the IO) for a criminal offence under section 27. However, application of section 27 should be considered according to the particular facts and the circumstances of individual cases. Although sufficient evidence to satisfy the criminal standard of proof for an offence under section 27 is not available in this particular case, it does not mean that section 27 would not be applicable in other cases. Furthermore, such activities are also regulated under the relevant licence conditions. If the circumstances so warrant, the Authority will take regulatory action under the appropriate provisions to regulate such activities. 7

8 10. Under the Class Licence for In-Building Telecommunications Systems, the class licensee shall take reasonable measures to install, establish, operate and maintain the in-building telecommunications system in such a way as not to cause any direct or indirect harmful interference with or physical obstruction to any lawful telecommunications service, or the installation, maintenance, operation, adjustment, repair, alteration, removal or replacement of the facilities of any lawful telecommunications or utility service provider. In the process of the investigation, the Authority has considered whether or not the IO is a class licensee for the in-building telecommunications system and whether or not the IO has breached the conditions thereof. During the validity of the Service Contract between Rediffusion and the IO, the horizontal drop cables formed part of the Existing SMATV System under regulation of the SMATV licence of Rediffusion. After the expiry of the Service Contract with Rediffusion, the IO retained Cheung Hing to install the New SMATV System. The horizontal drop cables form part of the New SMATV System under regulation of the SMATV licence of Cheung Hing. The disconnection was effected when Cheung Hing installed the new SMATV system and thus the Authority considers that the problem should be addressed under the relevant SMATV licence. In a situation where the in-building telecommunications system is not governed by other telecommunications licence as in this case, the IO shall ensure compliance of the obligations imposed on it as a class licensee by virtue of the in-building telecommunications system class licence. 8

9 General Condition 3(1) of SMATV Licence 11. Cheung Hing is licensed under the SMATV Licence (Licence No. 0030) ( SMATV Licence ). Under General Condition ( GC ) 3(1) of the SMATV Licence, the licensee shall operate the system in such a manner as not to cause interference with any other means of telecommunications. Interference under GC 3(1) includes electrical and physical interference. 12. The vertical coaxial cable of the Existing IBCCDS has formed part of HKCTV s network for the delivery of subscription television service. By disconnecting the horizontal drop cables from the vertical coaxial cable of the Existing IBCCDS, Cheung Hing has caused physical interference with means of telecommunications of HKCTV and has contravened GC 3(1) of the SMATV Licence. The instruction of the IO to establish the New SMATV System does not exonerate Cheung Hing from the licence obligation to prevent interference with other means of telecommunications. Cheung Hing, as an SMATV licensee, should have advised IO that it had to comply with its licence obligations in the establishment of the New SMATV System. Condition 54 of the Subscription Television Broadcasting Licence 13. Under Condition 54 of the Renewed Subscription Television Broadcasting Licence ( Subscription TV Licence ), HKCTV shall not in providing, establishing, operating, adjusting, altering, replacing, 9

10 removing or maintaining any telecommunications line or telecommunications installation in, over, upon any land for the purpose of the licence, obstruct, interfere with, or cause or permit damage to, any other telecommunications line or telecommunications installation, or means of telecommunications or telecommunications service. 14. The horizontal drop cables are telecommunications lines which the IO has the right to re-deploy its use after expiry of the Service Contract, including retaining a new SMATV licensee to provide SMATV services to the residents at the Premises through the horizontal drop cables. Evidence emerged from OFTA s investigation indicates that the IO had more than 6 months prior to expiry of the Service Contract expressed its intention of establishing a new SMATV system. The IO therefore requested Rediffusion to dismantle the part of the Existing SMATV System owned by Rediffusion from the Premises upon the termination of the Service Contract and had informed HKCTV that HKCTV would not be permitted to use the Existing IBCCDS to provide subscription television service. The IO has repeatedly requested HKCTV to make appropriate arrangement for HKCTV to continue to provide subscription television service at the Premises. However, without reaching agreement with the IO on the use of the horizontal drop cables, HKCTV continued to provide subscription television service at the Premises through the Existing IBCCDS System. Although the horizontal drop cables are not obstructed from functioning, the Authority has considered whether HKCTV s behaviour has contravened Condition 54 of the Subscription TV Licence which imposes upon HKCTV an 10

11 obligation not to obstruct lawful use of any other telecommunication line by any other person who has lawful right to use the telecommunication line, i.e. the lawful use of the horizontal drop cables by the IOs in this case. After considering all the facts and surrounding circumstances of the case, the Authority is not minded to conclude that HKCTV has breached Condition 54 of the Subscription Television Licence. 15. However, the Authority would like to express his disagreement with the conduct of HKCTV which has the effect of depriving the IO of the right to re-deploy the horizontal drop cables for the establishment of a new SMATV system to serve residents in the Premises after expiry of the Service Contract. HKCTV s conduct also contradicts with the Government s policy of allowing customers to have unimpeded access to telecommunications services of their choice as the continued use of the Existing IBCCDS by HKCTV without appropriate arrangement to enable the IO to establish a new SMATV system for delivery of SMATV services would deprive of the right of a resident of access to both subscription television and SMATV services concurrently although it is technically feasible for both services to be made readily available for his choice. Appropriate arrangement should therefore be made to resolve this matter. Should commercial negotiation fail, sections 36A and 36B of the Telecommunications Ordinance offer a solution to enable co-existence of the two services by way of interconnection. 11

12 Regulatory Action 16. The facts emerged from the investigations transpired that although malpractice might, in some way or another, have been committed by each of the parties involved in this incident, there are extenuating circumstances which could serve to mitigate their conduct. The Authority has carefully considered the special circumstances of the case, including: (a) the IO might have been aggrieved by the inaction of HKCTV in responding to the IO s request to make appropriate arrangement in relation to the continued use of the Existing SMATV System; (b) Cheung Hing might be following the instruction of the IO to deploy the horizontal drop cables which the IO has the right to use in installing the New SMATV System for the benefit of the residents of the Premises; (c) HKCTV might be aggrieved by the interruption caused to the subscription television service transmitted through a telecommunications installation; and (d) Remedial actions have been taken by the parties to rectify the situation and services have been restored in the Premises. all parties have been cooperative in taking the remedial actions. 12

13 17. After careful evaluation of the evidence and surrounding circumstances of this case, the Authority considers that it is not appropriate in the circumstances to take regulatory or enforcement action against any party in relation to this incident. Rather, the Authority considers that the public interest could better be protected if guidance can be offered as a result of this incident to deter future occurrence of such malpractice to the prejudice of the residents interest. The Authority however wishes to express disagreement with the conduct of the parties and reminds the parties that they should ensure compliance with the provisions of the Ordinance and licence conditions. In particular, as the Authority has found that Cheung Hing has contravened GC 3(1) of the SMATV Licence (paragraph 12), the Authority hereby gives a warning to Cheung Hing that it should ensure compliance of its obligation under GC3(1) of the SMATV Licence and that any like conduct in the future may likely result in a financial penalty under section 36C of the Telecommunications Ordinance or other regulatory action as the Authority thinks fit. In relation to allocation of costs of the remedial actions taken by the parties (as mentioned in paragraph 5 above), all the parties should negotiate for a commercial agreement on the cost sharing. In case a commercial agreement cannot be reached, either party may request the Authority to determine pursuant to section 36A of the Ordinance. 18. In order to facilitate resolution of complex issues involving conflict of interests among different parties, interested parties are advised 13

14 to observe the following guiding principles when they encounter similar situations in future: (a) Before the termination of the service contract between an operator and the incorporated owners, owners of the building or the property management company (as the case may be, hereunder referred to as building owner ) for the maintenance and operation of an SMATV system including the IBCCDS, the operator and the building owner should discuss the necessary arrangements so as to ensure that upon termination of the service contract, the broadcasting and telecommunications services to be delivered to the residents in the building are not to be affected. (b) The necessary arrangements referred to in (a) above include but are not limited to interconnection agreement or commercial agreement to use the telecommunications line or installation, etc. concerned with the building owner or any other operator concerned, as the case may be, which should be negotiated and entered into before the termination of the service contract. (c) Operators shall comply with the relevant licence conditions which prohibit obstruction and interference to other telecommunications line or installation, etc. (d) Any party may ask the Authority for assistance, for example, mediation, determination under section 36A or direction for securing 14

15 interconnection under section 36B, if there is any difficulty arising from (a) to (c) above. 19. It must, however, be emphasized that it is a basic legal obligation to comply with the provisions of the Telecommunications Ordinance and the relevant licences, the absence of guidance should not be used as an excuse or defence for any non-compliance which has already occurred. Nothing herein shall prejudice or limit the power of the Authority to instigate investigation or take regulatory action against any malpractice which has occurred if the circumstances so warrant. On the other hand, with regard to situations in the future similar to that in the current case, the Authority will take into consideration whether the party concerned has adhered to the principles set out in the preceding paragraph in deciding if the party has been in breach of section 27 of the Ordinance or the relevant licence conditions. Office of the Telecommunications Authority 7 May